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Starting a business with no money and going big

02-24-2007, 09:08 PM

If you read this article, you see that this entrepreneur was really creative in how he got started. The average person isn&#39;t going to jump into the makeup business without some background in it. Well he had 12 years of background and was able to get his business going with no money, that&#39;s to creative thinking and a loan from a friend.

If you read this article what did you think of it?

Could any of this knowledge help you?

A cosmetics company&#39;s creative cash flow - I spent 12 years in the cosmetics industry in the U.S., where I grew up, and Europe before starting my company, Mascara Plus. It&#39;s a subcontractor based in Milan, and we sell to makeup companies, mostly in Europe.

Other subcontractors do all kinds of color cosmetics, but we produce only mascara. Large firms come to me and ask for a specific formulation - a mascara that lengthens lashes or adds volume or is waterproof. We put together some samples, and if they like what we&#39;ve come up with, they place an order. We can handle big contracts - 200-liter batches of mascara, enough to fill 20,000 units - but when I launched the company in 2002, I had to do everything on a shoestring.

This is a capital-intensive business - it&#39;s hard to start from zero. Back then I had no factory and very little money (also no clients and no employees), so banks weren&#39;t likely to give me a loan. Instead I found an Italian who had a shampoo factory with a lab attached to it. I could use his equipment, but our products were different enough that I didn&#39;t have to worry about his stealing my formulas.

We hashed out a deal in which I could work in his labs to develop samples, and if I signed any I clients, I would have to use his facilities to manufacture the product. It was a good setup - I paid no money upfront, and it gave me access to a factory that I could show to clients.